CALGARY – TransCanada Corp. said Wednesday it intends to file a challenge under the North American Free Trade Agreement (NAFTA) seeking US$15-billion in damages from the United States government over President Barack Obama’s denial of the Keystone XL pipeline.

In addition, the Calgary-based company filed a lawsuit in U.S. Federal Court in Houston claiming Obama’s decision to deny construction of Keystone XL exceeded his power under the U.S. Constitution.

In a 27-page notice of intent to pursue the NAFTA challenge, the Calgary-based pipeline company said Obama’s denial was politically driven, directly contrary to the conclusions of own administration’s studies, and in violation of U.S. obligations under the agreement.

After seven years of review involving massive documentation, scientific justification and billions in spending by TransCanada, Obama denied the permit Nov. 6, explaining: “America is now a global leader when it comes to taking serious action to fight climate change, and frankly approving this project would have undercut that global leadership.”

The announcement was made just before the UN Climate Change summit in Paris, where Obama played a leadership role to encourage a global agreement to reduce global warming.

It was the first time the U.S. denied a permit for a cross-border pipeline – and the first time it used such rationale, TransCanada said late Wednesday.

The State Department concluded Keystone XL would not significantly increase global greenhouse gas (GHG) emissions and that, in fact, alternative methods of oil transportation were more GHG intensive, and concluded at least five times that Keystone XL would not have significant impacts to the environment, the company said.

“The administration sought to explain this perverse decision by saying that the pipeline was perceived to be bad for the environment, and the administration had to appease those in the international community who held that (false) belief,” TransCanada said in the NAFTA document.

“The politically driven denial of Keystone’s application was contrary to all precedent; inconsistent with any reasonable and expected application of the relevant rules and regulations, and arbitrary, discriminatory and expropriatory.”

TransCanada said it’s seeking US$15-billion in compensation because that is the estimated loss of the value of the Alberta-to-Texas pipeline if it had been completed, including billions in assets that are now useless as well as lost economic return. The southern part of the project is already in operation, as is the base Keystone system.

The lawsuit in Texas does not seek damages, but a declaration that the permit denial is without legal merit and that construction of the pipeline can proceed without further presidential action.

“No president has ever prohibited the development of a significant, predominantly domestic facility,” TransCanada said in the lawsuit. “Nor has any president prohibited the development of any cross-border commercial facility on the ground that he must restrict foreign and domestic commerce to enhance his influence in foreign affairs.”

TransCanada has pondered a NAFTA challenge for some time, but the Texas lawsuit — it names U.S. Secretary of State John Kerry, Attorney General Loretta Lynch, Homeland Security Secretary Jeh Charles Johnson, Interior Secretary Sally Jewell — was not expected.

The company said it’s aware that the U.S. has never lost a NAFTA challenge, but believes there was a clear violation of the agreement after a review of the administration’s actions.

As a result of the permit denial, TransCanada said it’s reviewing $4.3 billion invested in the project and related assets and expects to take an estimated $2.5 billion-to-$2.9 billion after-tax write-down in its fourth quarter results.

TransCanada said it’s preparing for a several-year legal process, though it’s keeping the door open to applying for a new permit.